New York delayed: US dot backs away from opening congestion pricing 'Pandora's Box' at JFK.(REGULATION)(John F. Kennedy International Airport)

The global airline industry took notice in the last months of 2007 when President George W. Bush and Transportation Secretary Mary Peters suggested that the US government would impose "congestion pricing" at one of the world's most pivotal airports, New York JFK. President Bush's expression of support for a "market-driven" solution to excessive flight delays at JFK and his comparison of peak-hour airline traffic to rush-hour roadway congestion set off alarm bells in the offices of senior airline executives around the world.

Imposition of congestion pricing or "slot auctions" at an airport with a high international profile such as JFK would open a "Pandora's Box," IATA Regional VP-North America Doug Lavin tells ATW. If the US government can auction landing/takeoff rights to the highest bidder and/or charge "peak" fees at JFK, other governments could view that as justification to attempt experimental congestion reduction solutions at crowded airports, Lavin says. "Other countries may look to auctions as revenue-generating mechanisms. This could set a dangerous precedent." Further, airlines throughout the world worry that peak pricing and auctions could make it difficult to gain entry into the coveted New York market.

US carriers led by the Air Transport Assn. mounted a high-decibel lobbying campaign throughout the autumn against the imposition of congestion pricing at JFK and other New Yorkarea airports. After all, Delta Air Lines, JetBlue Airways and American Airlines have invested heavily at JFK while Continental Airlines dominates nearby Newark and US Airways, AA and DL have a considerable presence at LaGuardia (ATW, 11/07, p. 60). Those carriers bristled at the notion of having to buy or bid for capacity they already use.

"Carriers have invested millions and millions of dollars in establishing operations [from JFK] to destinations all over the world and [DOT is] trying to nip in the bud that new service," ATA President and CEO James May said at the height of the debate, responding to Peters' expression of a "strong preference for using market mechanisms like congestion pricing to preserve passenger choice while reducing ... crippling congestion and debilitating delays at JFK." May warned Peters not to use a "meat ax" to "slash capacity at a leading international gateway. …

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